Business, Legal & Accounting Glossary
Substitute checks are digital copies of the front and back of paper checks that offer the same legal protections and obligations as the originals, including the ability to serve as proof of payment. Each check is formatted on a separate piece of paper that is slightly larger than the original, with the words “This is a legal copy of your check” next to the image. Using digital copies that can be transmitted electronically allows banks to process payments more quickly and efficiently than when paper checks had to be routed through the check clearing system. Because most banks destroy original checks after archiving substitutes, you’re unlikely to receive cancelled checks with your bank statement. Your bank may send you replacement checks, but it is more likely to send you a line item statement or an image statement with photocopies of the front and backs of cancelled checks grouped on a page. These are not replacement checks, but they can frequently be used as proof of payment. If you require a physical copy of a substitute check, contact your bank. There may, however, be a fee.
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This glossary post was last updated: 13th April, 2022 | 0 Views.